Canadian Government To Buy Oil Pipeline Project for $4.5 Billion

Canadian Prime Minister Justin Trudeau speaking to the European Parliament in February 2017.

Canadian Prime Minister Justin Trudeau speaking to the European Parliament in February 2017. © European Union 2017 - European Parliament

The Canadian government announced it will spend $4.5 billion ($3.5 billion USD) to buy the beleaguered Trans Mountain pipeline expansion project. The expansion plan — which would triple the volume of oil being carried from Alberta’s tar sands to an export terminal near Vancouver, from 300,000 barrels a day to 890,000 — has faced years of fierce opposition from environmentalists and some indigenous groups.

Canadian finance minister Bill Morneau told reporters this morning that the government will take ownership of the project temporarily until a new owner can be found. The purchase agreement will ensure that construction of the new pipeline continues through this summer.

“Our message today is simple: when we are faced with an exceptional situation that puts jobs at risk, that puts our international reputation on the line, our government is prepared to take action,” Morneau said.

Kinder Morgan, the energy infrastructure company behind the project, had set a May 31 deadline on whether to proceed with the Trans Mountain expansion, which has been delayed several times over concerns about oil spills, with the government of British Columbia, several local municipalities, and some indigenous groups opposing the project. But the Canadian federal government has been a staunch supporter, with Prime Minister Justin Trudeau calling Trans Mountain “a vital project in the national interest” on Twitter Tuesday morning.

For Trudeau, the pipeline has served as a litmus test of his environmental record. He has been a vocal proponent of international climate action and is pushing for a national carbon price to reduce Canada’s greenhouse gas emissions. But his support of several fossil fuel projects, including the Trans Mountain pipeline, has frustrated environmentalists, who see it as contradictory to his climate stance.

“Calling yourself a climate leader and buying an oil pipeline is like, well… buying an oil pipeline. @JustinTrudeau is hypocritical beyond belief,” wrote Jamie Henn, a co-founder of the environment group, on Twitter.